S&P says Australia budget update has no impact on rating, pessimistic on outlook

Reuters Staff

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An employee counts Australian dollar banknotes at an exchange office in downtown Cairo, Egypt, April 19, 2016. REUTERS/Amr Abdallah Dalsh/Files

SYDNEY (Reuters) - S&P Global Ratings on Monday said a mid-year update on the Australian government’s budget update had no immediate effect on the credit rating or outlook of the country, though the agency remained pessimistic on the deficit.

“The government’s worsening forecast fiscal position, as outlined in its latest budget projections earlier today, further pressures the rating,” said the agency, which put Australia’s triple A rating on negative watch in July.

“We remain pessimistic about the government’s ability to close existing budget deficits and return a balanced budget by the year ending June 30, 2021,” said S&P.

The agency said it would be watching the government’s willingness and ability to enact new budget savings or revenue measures over the coming months.